The debate over taxes and spending is underway in Augusta, as members of the Legislature's Appropriations Committee opened a series of public hearings on the Gov. Paul LePage's plan to balance the state's books through June. That plan includes about $153 million in spending cuts, including more than $35 million in reductions called for in a curtailment order issued late last year. To close most of the gap, LePage is proposing to tap into state contingency accounts, and make cuts in K-12 education. A.J. Higgins has more.

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Hearings Open on LePage Plan for $153M in Spending

Duration:2:49

Members of the Legislature's Appropriations hear testimony on Gov. Paul LePage's budget proposal.

Since late last year, Maine lawmakers have been preparing for a major course correction in the current budget. It all started when revenue forecasters predicted a significant drop in tax collections. Because Maine's Constitution requires the governor to maintain a balanced budget, Gov. Paul LePage responded with a $35 million budget curtailment order, and then a larger plan to close the hole through the end of June.

Lawmakers are reviewing the governor's so-called supplemental plan, which contains $153 million in cuts and about $118 million in new spending.

Appropriations Committee Chair Peggy Rotundo, a Lewiston Democrat, says she's confident that the panel can reach consensus on the package.

"We are still looking at a bipartisan, unanimous budget, and we're confident we can get there," Rotundo says. "We have some work to do between now and then, but we'll get there."

About 70 percent of the total reductions in the plan come from three areas: State funding for local K-12 education, otherwise known as General Purpose Aid, would lose more than $12 million dollars. The plan would also defer more than $18 million dollars in GPA until July, the first month of the new budget cycle.

LePage also proposes tapping $20 million from other General Fund reserve accounts and another $40 million from the state's budget stabilization fund, otherwise known as the Rainy Day Fund.

Republican committee member Kathleen Chase, of Wells, says the revenue shortfalls have left the state with few options.
"We all need to have a surplus to fall back on in the bad days, but then again, this is a time for that," Chase says.

"When you think about it, what's the Rainy Day Fund there for?" asks Assistant Republican Senate Leader Roger Katz, of Augusta, who also supports the move. "It's there for very difficult times when it's raining, and it is, figuratively speaking, raining right now. And I think the governor's approach to using that fund makes sense."

And Kathleen Chase of Wells says the Rainy Day Fund would be likely be replenished when the panel takes up the governor's two-year budget next month.

One area that generated some discussion among lawmakers in the hearing was a $1.4 million reduction to a program that helps families adopt children with special needs who are state wards. The program cuts will affect more than 1,200 children.

But state Department of Health and Human Services Commissioner Mary Mayhew (left) says the money would be restored in the new two-year budget. "On average this is a reduction of about $11 per day per child over that three-month period," Mayhew told the panel.

The Appropriations Committee is scheduled to take up the governor's proposed cuts to General Purpose Aid on Friday.